October 2, 2015 – Plano, TX – J. C. Penney Company, Inc. today announced actions that will significantly reduce the benefit obligation of its qualified pension plan (“the Plan”) without requiring any cash contribution from the Company. JCPenney recently completed a lump-sum offer for select participants in the Plan, and it has also entered into an agreement with The Prudential Insurance Company of America (“Prudential”) to purchase a group annuity contract that will settle a substantial portion of JCPenney’s remaining retiree pension benefit obligations.
Approximately 12,000 retirees and surviving beneficiaries elected to receive voluntary lump-sum payments to settle the Plan’s pension obligation to them. In addition, approximately 1,900 former employees of JCPenney who have deferred vested benefits elected to receive voluntary lump-sums. The response deadline for the lump-sum offer was September 18, 2015, and the Plan expects to make the lump-sum payments in November once the final settlement amount is determined.
*Transactions expected to reduce $5 billion U.S. pension obligation by 25-35%
*No cash contribution required
*Plan expected to remain overfunded on accounting and ERISA bases
*Prudential selected to assume the benefit obligations for up to 43,000 retirees and their beneficiaries
*No change to active associates or their pension plan benefits
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